Confirm that it's 1/640th of the 1950 budget?! That seems insane. (Is it perhaps 1/6.4 [0.156% or 0.00156x] instead?)
The Federal Railroad Administration alone has a budget over $1.5BB. Does that mean we were spending the equivalent of almost a trillion of today's dollars a year (~25% of receipts) on rail in 1950? That seems several orders of magnitude wrong.
The numbers I read was that since 1950 the railway infrastructure budget has only increased by 30%. US budget in 1950 was around 70 billions, while 2018 it is 7 trillions. (https://www.usgovernmentspending.com/fed_spending_1950USbn)
The proportional funding should thus have went down by basically the same amount as the government spending went up. I might very well be wrong, and The Federal Railroad Administration was created in 1966 so I am not sure exactly which part of the government paid for railway before that point, and the 30% claim could of course be wrong. Department of Transportation has had a increase in funding by about 10x from 1970 to 2008, but I could not find exact numbers for the Federal Railroad Administration.
To put down some numbers, Americans spend just 6.4% of their household income on food. Around 1950 they spent about 20%. It not that Americans eat one fifth as much as they used to (if anything the claim is that people eat more today), so the life style change is both that people need to pay more and eat less.
Similar if we talk about railway budget, the US government spend today about 0.00156% in proportion to the budget of 1950. It basically stopped investing into the railway infrastructure. Naturally the proportion of the population (and industry) that use the railway system has also gone down, through not as extreme as the budget.
The root of the problem is that people don't want to pay more to get less, and then also consume less at the same time. They also don't want to pay more taxes in order to invest heavily in infrastructure that take half a century before people see the benefits.